Extend ‘work from home’ expenses tax credit to all employees, urges union group

A new tax break for workers to cover expenses – regardless of whether they work remotely or not – has been urged in a submission to an expert group.

The Irish Congress of Trade Unions (ICTU) is proposing that a tax credit be rolled out for all PAYE workers on their employment-related expenses to ensure “equity”. This is because thousands of workers are in jobs that cannot be done remotely.

It is understood that the proposal would replace the unvouched €3.20 a day contribution to home working expenses that employers can make. Few employers are believed to make the contribution, which is not compulsory.

The new tax relief is proposed in a submission by ICTU to the Commission on Taxation and Welfare, which will make recommendations to Government.

It is based on a German system of tax relief on earnings that allows employment costs to be deduced from income. All employees receive a tax deduction of €1,000 a year on an unvouched basis. Expenses greater than this sum can be claimed by those working remotely, but receipts must be produced.

Currently, Irish employees working from home who do not get the €3.20-a-day contribution can claim relief on 10pc of utility bills and 30pc of broadband costs.

“Congress has been unequivocal over the past two years that remote workers should not be left to carry the business operational cost of their employer when remote working,” ICTU says.

It says a tax strategy group acknowledged the potential shifting of overhead costs from employer to employees.

However, it says the group incorrectly concluded these costs were “balanced… by potential savings associated with working from home such as reduced commuting costs”.

The submission says bosses do not compensate staff for the cost of travelling to work or of being in the office so have no right to make a claim on any savings to meet their operational costs.

“The tax strategy group notes specific tax relief for remote working raises equity concerns between workers who have the capacity or option to work remotely and those that don’t,” it says.

“To address this inequity, Congress recommends a tax credit for all PAYE and self-employed workers in respect of employment-related expenses.”